If you remarry have you thought how that could affect the inheritance you have in mind for your children? Unfortunately for some it is just too easy to disinherit your children by accident.

The Normal Sentiment Of Parents.
The vast majority of parents want their children to inherit their estate (i.e. property and other assets) when the time comes. In fact the most common type of Will tends to leave everything to the surviving spouse and then to their children.

However, If you have remarried you probably have never thought how that could affect any inheritance you have in mind for your children. Typically people still think that one way or another their estate will go to their children. That belief may be wrong if you remarry! The name for this problem is “Sideways Disinheritance” or “Second-Marriage Syndrome”.

An Example To Illustrate The Problem.
Alan & Betty divorce. Betty gets £300,000 settlement in the divorce process. They have grown up children.

Betty then marries Charles and they buy a house together. Betty puts in £250,000 to match Charles’ contribution. As a married couple they buy in the normal way, as joint tenants.

Of her remaining £50,000, Betty put £30,000 into a joint savings account with Charles. The remainder is put into sole bank and saving accounts in Betty’s name.

If Betty died before her new husband Charles, with or without a Will the maximum that Betty’s children could inherit is £20,000. This is because the jointly owned house and savings account (with a combined value of £330,000) is already owned by Charles.

Betty cannot give away property belonging to another person. The money in the joint account and her share in the house does not and cannot form part of any inheritance.

What Can Be Done To Stop This Happening?
Firstly, sever the joint tenancy ownership of the house, to become tenants-in-common.

This means that as tenants-in-common each owns a share of the property, normally 50% but it can be in different proportions. As a result each now owns a share of the house that can be given away in a Will (or even sold during their lifetime)

Will A Surviving Spouse Be Forced Out Of The Marital Home?
That’s easy enough to deal with. Both husband and wife set up a Life Interest Trust in their Wills. This gives the surviving spouse the right to use the house (or it’s value) until s/he dies and then the half share in the Life Interest Trust passes to the children.

It serves protects the interests of the surviving spouse and the children in a balanced way.

What About Money Or Other Assets?
Any assets held in a single name or any share of assets held as tenants-in-common can pass directly to the children or could be put into the Life Interest Trust.

Any interest or dividends accrued by such assets held in Trust would be paid to surviving spouse until his/her death at which time the money and assets would be distributed to the children.

Can It Be Set Up To Apply Until Remarriage Or For A Fixed Period?
The way the Trust is set up can be varied. In fact a lesser version of a Life Interest Trust is called 'Rights of Residence' and can be set up until remarriage or for a few years or whatever event is specified. It is very much up to the person setting up the Trust to specify the terms of it.

Is It Really That Simple?
In principle it is. The Trust itself has some legal complexity and does not lend itself to be set up in a DIY Will (or at least it shouldn't) but for a suitable qualified lawyer it is fairly straightforward.

By understanding this serious problem and getting the right Will in place you can ensure that your children can inherit whilst being fair to your new spouse.